Rates of alcohol and other drug use among American youth remain high, making adolescent substance use a pressing public health issue. This proposal addresses one important and poorly understood aspect of adolescent substance use the relationship between substance use and educational outcomes during youth. The objective of this Mentored Research Scientist Development Award proposal is to give Pinka Chatterji, Ph.D. the opportunity to conduct an integrated, five-year study of substance use and children's educational development. Under the sponsorship of Dr. Michael Grossman, Dr. Chatterji proposes to use several national data sets and econometric methods to estimate: (1) the relationship between reading and math achievement test scores, behavior problems, and poor grades in elementary and middle school, and the later initiation, frequency, and intensity of alcohol and other drug use; and (2) the impact of adolescent alcohol and other drug use on the quality and quantity of education completed. The economic approach used in the study focuses on testing for and addressing problems of endogeneity in the substance use and educational outcome measures. The study also links substance use and educational outcomes during youth to state-level policies that decision makers can control, such as state excise taxes on beer, marijuana decriminalization, teachers' salaries, and student/teacher ratios. The data sets used in the study are: (1) The National Longitudinal Survey of Youth, 1979; (2) Children of the National Longitudinal Survey of Youth; (3) The National Longitudinal Survey of Youth, 1997; and (4) The National Education Longitudinal Study, 1988-1996. Dr. Chatterji's long-term career goal as a substance use researcher is to combine her training as a health economist with a solid base in psychology and education research. To achieve this goal, she will work closely with Dr. Grossman and with a multidisciplinary group of co- mentors from Columbia University and her home department, the Department of Epidemiology and Social Medicine at Albert Einstein College of Medicine/Montefiore Medical Center. She also will devote the first two years of the award to coursework, supervised reading and seminars in developmental psychology, educational policy, primary data collection, general substance use issues, and research ethics. This background will give Dr. Chatterji the skills she needs to design novel, policy-relevant substance use research projects in the future as an independent investigator.